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Fed talk doesn't mean Fed action

Thursday, May 19, 2011 - 01:50

May 18 - Summary of business headlines: Minutes from the Federal Reserve's April meeting show most policymakers were willing to talk, but not act; Glencore, LinkedIn IPOs ready for debut; Stocks climb as oil hits $100. Conway Gittens reports.

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Wall Street happily interpreted minutes from the Federal Reserve's last meeting as a sign the Fed is ready to talk about removing extra stimulus, but not yet ready to act. Fed minutes show policymakers extensively discussed ways the Fed could roll back the extra stimulus put in place. The group even discussed a timeline, with most believing a rate hike should come first, then the central bank should sell off assets from its $600 billion bond buying program, commonly known as QE2. The Fed's transparency is welcomed on Wall Street, says Cuttone VP Bernie McSherry. SOUNDBITE: BERNIE MCSHERRY, VP, CUTTONE AND COMPANY (ENGLISH) SAYING: "The Fed made it very clear they are going to do what it takes to get asset prices up, they've gotten a lot of that, the question now: is the threat of inflation enough to counterbalance that? I think personally that the Fed would like to see a bit of inflation. They'd like to see potential homeowners feel a little bit of sense of urgency that things maybe moving up - that people in general are more apt to buy now, than later." Much attention on the IPO market. Glencore, the world's largest diversified commodities trader, begins trading in London and Hong Kong on Thursday, after launching the biggest IPO London has ever seen. And professional social networking website LinkedIn begins trading at the NYSE amid surging investor demand for internet properties. Looking at the final numbers: Wall Street closed higher with the Nasdaq taking the lead with a 1.1 percent rally. Crude oil closed above $100 a barrel for the first time in a week. That rebound, along with strength in other commodities, helped European stock markets close higher. Conway Gittens, Reuters

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Fed talk doesn't mean Fed action

Thursday, May 19, 2011 - 01:50